|
EXHIBIT
10.9
MIDAMERICAN ENERGY HOLDINGS COMPANY
EXECUTIVE VOLUNTARY DEFERRED COMPENSATION PLAN
(Restated effective as of January 1, 2007)
MIDAMERICAN ENERGY HOLDINGS COMPANY
EXECUTIVE VOLUNTARY DEFERRED COMPENSATION PLAN
MidAmerican
Energy Holdings Company hereby amends and restates the
MidAmerican Energy Holdings Company Executive Voluntary
Deferred Compensation Plan (“Plan”) for the
benefit of certain Employees. The primary purpose of the Plan
is to allow employees to defer compensation. The Employer will
pay benefits under the Plan only in accordance with the terms
and conditions set forth in the Plan. This Plan is a restated
plan effective as of January 1, 2007 (See Section 7.02(A) for
good faith compliance as to 409A Amounts during 2005, 2006,
2007 and 2008). The Plan was originally established
effective July 1, 1999.
PREAMBLE
Plan Type. The Plan is an unfunded nonqualified deferred
compensation plan maintained “primarily for the purpose of
providing deferred compensation for a select group of management or
highly compensated employees” (“top-hat
plan”).
Possible Nonuniformity . The Employer need not provide the
same Plan benefits or apply the same Plan terms and conditions to
all Participants, even as to Participants who are of similar pay,
title and other status with the Employer. The Employer may create a
separate exhibit for one or more Participants, specifying such
terms and conditions as are applicable to a given Participant. The
Employer, in a separate exhibit, may modify any Plan provision with
respect to one or more Participants.
I. DEFINITIONS
1.01
“Account”
means the account the Employer establishes under the Plan for
each Participant and as applicable means a Participant’s
Elective Deferral Account, or Employer Contribution
Account. An Elective Deferral Account shall consist
of subaccounts as selected by the Participant, and which shall
be a Retirement Account, an In-Service Account and an
Education Account, as described in Section
4.03(A).
1.02
“Accrued
Benefit” means the total dollar amount credited
to a Participant’s Account.
1.03
“Applicable
Guidance” means Treasury Regulations issued
pursuant to Code §409A, or other written Treasury or IRS
guidance regarding Code §409A, which is in addition to
IRS Notice 2005-1 (“Notice 2005-1”).
1.04
“Base
Salary” means a Participant’s compensation
consisting only of regular annual salary and excluding any
other compensation.
1.05
“Beneficiary”
means the person or persons entitled to receive Plan benefits
in the event of a Participant’s death.
1.06
“Code”
means the Internal Revenue Code of 1986, as
amended.
1.07
“Compensation”
means Base Salary, performance awards, and annual incentive
bonuses (other than Employer long-term incentive
awards). Inclusion of any other forms of
compensation is subject to approval of the
Employer.
1.08
“Deferred
Compensation” means the Participant’s
Account Balance attributable to Elective Deferrals and
Employer Contributions and includes Earnings on such amounts.
“Compensation Deferred” is Compensation that the
Participant or the Employer has deferred under this
Plan.
1.09
“Earnings”
means the notional earnings, gain and loss applicable to a
Participant’s Account as described in Section
5.02.
1.10
“Effective
Date” of the Plan as amended and restated is
January 1, 2007 (See Section 7.02(A) for good faith compliance
as to 409A Amounts during 2005, 2006, 2007 and
2008).
1.11
“Elective
Deferral” means Compensation a Participant elects
to defer into the Participant’s Account under the
Plan.
1.12
“Elective Deferral
Account” means the portion of a
Participant’s Account attributable to Elective Deferrals
and Earnings thereon (and which shall consist of Retirement,
In-Service and Education subaccounts).
1.13
“Employee”
means a person providing services to the Employer in the
capacity of a common law employee of the Employer (other than
persons employed by PacifiCorp, HomeServices of America, Inc.
or any subsidiary of either corporation).
1.14
“Employer”
means MidAmerican Energy Holdings Company, an Iowa
corporation, and, with respect to Participants who are
employees of an affiliate of MidAmerican Energy Holdings
Company, Employer also means any such affiliate; provided,
however, that with respect to all matters involving
administration of the Plan, including the authority to
designate Employees who are Participants in the Plan and to
amend and terminate the Plan, Employer shall only mean
MidAmerican Energy Holdings Company. With respect to the
obligation to make payments to any Participant under the Plan,
Employer shall mean MidAmerican Energy Holdings Company and
the Employer who employs the Participant, but not any other
Employer. For purposes of determining whether there
has been a Separation from Service with the Employer, Employer
means all entities with whom the Employer would be considered
a single employer under Code §§ 414 (b) and
(c).
1.15
“Employer
Contribution” means amounts, if any, the Employer
contributes or credits to an Account under the Plan, excluding
Elective Deferrals.
1.16
“Employer
Contribution Account” means the portion of a
Participant’s Account attributable to Employer
Contributions and Earnings thereon.
1.17
“ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
1.18
“ Participant”
means an Employee of the Employer who has met the eligibility
requirements of Section 2.01 and who has accrued a benefit
under the Plan.
1.19
“Performance-Based
Compensation” means such amounts described in
Applicable Guidance .
1.20
“ Plan” means
the MidAmerican Energy Holdings Company Executive Voluntary
Deferred Compensation Plan . For purposes of
applying Code §409A requirements: (i) this Plan is an
account balance plan under Applicable Guidance; (ii) this plan
constitutes a separate plan for each Participant; and (iii)
except as the Plan otherwise provides, all Deferred
Compensation for a Participant is aggregated with that
Participant’s deferrals under any other account balance
nonqualified deferred compensation plan of the Employer in
which the Participant participates. Employer
Contribution Accounts are considered to be part of a
nonelective account balance plan type and Elective Deferral
Accounts are considered to be part of an elective account
balance plan type.
1.21
“Retirement
Age” means a Participant’s attainment of
age 55.
1.22
“Separation from
Service” means an Employee’s termination of
employment with the Employer or as otherwise defined in
Applicable Guidance.
1.23
“Specified
Employee” means a Participant described in Code
§416(i), disregarding paragraph (5) thereof. However, a
Participant is not a Specified Employee unless any stock of
the Employer (or of a member of the same group of controlled
entities as Employer) is publicly traded on an established
securities market or otherwise.
1.24
“Specified Time or
Pursuant to a Fixed Schedule” means a specific
time or schedule (but not the occurrence of an event) as a
Participant payment election may specify, and otherwise as
described in Applicable Guidance.
1.25
“ Taxable
Year” means the 12 consecutive month period
ending each December 31.
1.26
“ Trust” means
a trust described in Section 5.01.
1.27
“Unforeseeable
Emergency” means: (i) a severe financial hardship
to the Participant resulting from a sudden and unexpected
illness or accident of the Participant, the
Participant’s spouse or a dependent (as defined in Code
§152(a)) of the Participant; (ii) loss of the
Participant’s property due to casualty; or (iii) other
similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the Participant’s control.
The amount of the distribution may not exceed the amount
necessary to satisfy the Unforeseeable Emergency plus taxes
reasonably anticipated as a result of the distribution, after
taking into account the extent to which the hardship may be
relieved through reimbursement or compensation by insurance or
otherwise or by liquidation of the Participant’s assets,
to the extent that liquidation of such assets would not itself
cause severe financial hardship.
1.28
“ Valuation
Date” means the last day of each calendar month
and such other dates as the Employer may
determine.
1.29
“Vested”
means Deferred Compensation which is not subject to a
Substantial Risk of Forfeiture (as defined in Applicable
Guidance) or to a requirement to perform further services for
the Employer.
II. PARTICIPATION
2.01
Participant
Designated . The President of the Employer
shall designate and approve the Employees who are eligible to
participate in the Plan, such designation to be either by
name, job title or other classification. The
President may also notify a Participant that he or she is no
longer eligible to make future deferrals into the
Plan. Such termination of eligibility shall be
effective for compensation earned after January 1 following
such written notification to the
individual. However, until final distribution has
been made to such person from his or her Accounts, for all
other purposes under the Plan the person shall still be
considered a Participant.
2.02
Elective
Deferrals . Participants may make separate Elective
Deferrals to their Accounts with respect to Base Salary and
Compensation that is not Base Salary. All elections
to defer shall terminate upon Separation from Service,
Disability (as defined in Applicable Guidance) or a
distribution based on an Unforeseeable Emergency.
(A)
Limitations
. The maximum Elective Deferral for Base Salary is
50%. There is no limit for Compensation that is not
Base Salary. The minimum Elective Deferral for any
type of Compensation is 1%.
(B)
Form
and Timing . A Participant must make his/her Elective
Deferral election on an election form the Employer provides
for that purpose. Unless otherwise provided in this Section
2.02, a Participant must deliver his/her election to the
Employer prior to the beginning of the Taxable Year for which
it is to go into effect (or at such other time as Applicable
Guidance may provide), at which time the election shall become
irrevocable.
(C)
New
Participant . If an Employee first becomes a
Participant on a date which is not the first day of a Taxable
Year, the Participant must make and deliver his/her Elective
Deferral election for that Taxable Year not later than 30 days
after the Participant becomes a Participant. The election may
apply only to Compensation for services the Participant
performs subsequent to the date the Participant delivers the
election to the Employer. For Compensation that is
earned for a specified performance period, including an annual
bonus, and where the new Participant makes an Elective
Deferral election after the service period commences, the
Employer will pro rate the election by multiplying the
performance based Compensation by the ratio of the number of
days left in the performance period at the time of the
election, over the total number of days in the entire
performance period.
(D)
Election
Duration . A Participant’s Elective Deferral
election applies only to the Participant’s Compensation
earned in the next Taxable Year following the Taxable Year in
which the Participant makes the election. A Participant,
subject to Plan requirements regarding election timing,
including those in Article VII, may make a new election, or
revoke or modify an existing election effective no earlier
than for the next Taxable Year.
2.03
Employer
Contributions . In each Taxable Year, the Employer may
make discretionary Employer Contributions for any or all
Participants, which need not be uniform among
Participants.
2.04
Allocation
Conditions . There are no conditions generally
applicable to receive an allocation of Employer Contributions,
unless the Employer establishes conditions with respect to a
particular discretionary Employer Contribution.
2.05
Timing .
The Employer may elect to make any Employer Contribution for a
Taxable Year at such times as Code §409A or Applicable
Guidance may permit.
2.06
Administration
. The Employer will administer all Employer Contributions in
the same manner as Elective Deferrals, except as the Plan
otherwise provides. The Employer will credit any
Elective Deferrals to a Participant’s Account as soon as
practicable after the date the amount of the Elective Deferral
would otherwise have become due and payable to the Participant
and will credit any Employer Contributions to a
Participant’s Account as soon as practicable after the
date of the amount of the Employer Contribution is
determined. Any Employer Contribution is not
subject to an immediate Participant right to elect a cash
payment in lieu of the Employer Contribution and such amounts
are payable only in accordance with the Plan
terms.
III. VESTING AND FORFEITURE
3.01
Vesting Schedule . Participants shall always be
immediately one hundred percent (100%) Vested in their Elective
Deferral Accounts. The Employer may separately establish
a vesting schedule for any Employer Contributions.
3.02
Application of Forfeitures . A Participant will forfeit any
non-Vested Accrued Benefit upon Separation from
Service. The Employer will keep all
forfeitures.
IV. BENEFIT PAYMENTS
4.01
Separation from
Service or Death . The Employer will pay to the
Participant the Vested Accrued Benefit held in the
Participant’s Account following the earlier of the
Participant’s Separation from Service or death. Payment
will commence at the time and payment will be made in the form
and method specified under Section 4.03. In the event of the
Participant’s death, the Plan will pay to the
Participant’s Beneficiary the Participant’s Vested
Accrued Benefit or any remaining amount thereof if benefits to
the Participant already have commenced, in accordance with the
Participant’s election.
(A)
Distribution to
Specified Employees . Notwithstanding anything to the
contrary in the Plan or in a Participant election, the
Employer may not distribute to a Specified Employee, based on
Separation from Service, earlier than 6 months following
Separation from Service (or if earlier, upon the Specified
Employee’s death).
4.02
Other Payment
Events . In addition to the payment events under
Section 4.01, the Employer will pay to a Participant all or
any part of the Participant’s Account: (i) at a
Specified Time or Pursuant to a Fixed Schedule elected by the
Participant with respect to Education and In-Service
subaccounts; or (ii) based upon an Unforeseeable Emergency.
Payment will commence at the time and payment will be made in
the form and method specified under Section 4.03.
4.03
Form, Timing and
Method of Payment Election . All distributions will be
in cash. Subject to the provisions of this
paragraph, a Participant shall make an initial payment
election as to the method of payment under Section 4.03(A) and
may make a change to an election under Section 4.03(B). Until
the Employer completely distributes a Participant’s
Vested Accrued Benefit, the Plan will continue to credit the
Participant’s Account with Earnings, in accordance with
Section 5.02. Except as provided below, a
Participant may elect either a lump sum payment or
substantially equal annual installments (not to exceed 10)
with respect to a Retirement subaccount and an In-Service
subaccount. If no election is made as to method,
payment shall be made in a lump sum. Distribution
from an Education subaccount may only be made in 4
substantially equal annual
installments. Distributions from a Retirement
Account as a result of Separation from Service after
Retirement Age shall be made (or commence) in January of the
calendar year following the calendar year in which Separation
from Service occurs. Distributions from an
In-Service subaccount, an Education subaccount, or a
Retirement subaccount, when a Separation from Service occurs
prior to Retirement Age (including death prior to Retirement
Age), shall be made as soon as administratively feasible
following the date of Separation from Service (or death), and
shall be made in a lump sum payment (except that payments from
the remaining account balance in an Education subaccount or
In-Service subaccount, where payments have already commenced
prior to Separation from Service, shall continue to be made
under the schedule then in effect). If Separation
from Service occurs after Retirement Age and before
commencement of distribution from an In-Service subaccount or
Education subaccount, any such subaccount shall be added to
the Retirement subaccount and distributed
accordingly. Payments made because of
Unforeseeable Emergency shall be made (or commence) as soon as
administratively feasible following such event. In
the event of death after attaining Retirement Age or after
payments from an Account have begun, a lump sum payment to the
Beneficiary shall be made as soon as administratively feasible
after date of death if the Participant had previously elected
a lump sum distribution to the Beneficiary pursuant to Section
4.03(A) (initial payment election) or pursuant to Section
4.03(B)(1) (change to payment election). Disability
shall not be treated as a distribution event if Separation
from Service has not occurred.
(A)
Initial Payment
Election . A Participant, as to an In-Service
subaccount shall make an initial payment election with respect
to a Specified Time and pursuant to a Fixed Schedule at the
time of the Participant’s first Elective Deferral
election into such subaccount. A Participant, as to an
Education subaccount, shall make an initial election with
respect to a Specified Time at the time of the
Participant’s first Elective Deferral election into such
subaccount (the Fixed Schedule being 4 substantially equal
annual payments). As to a Retirement subaccount, a
Participant shall make an initial payment election as to a
method of payment (Fixed Schedule) at the time of his or her
first deferred election into such subaccount (the Specified
Time being the date following Separation of Service as
provided in Section 4.03 above). A Participant shall make any
permissible initial payment election on a form the Employer
provides for that purpose. At the time of any such first
Elective Deferral election into any Account, a Participant may
e
| 
